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Longitudinal Study: HILDA
Title: Risk Sharing, Vulnerability and the Global Financial Crisis
Authors: Miller, Stephen 
Institution: Monash University
Publication Date: 11-Jan-2014
Pages: 38
Keywords: Asymmetric Shocks, Consumption Insurance/Risk-Sharing, Financial Crises, HILDA, Vulnerability
Abstract: Tests using Household, Income and Labour Dynamics in Australia (HILDA) unit record data from 2006/2007 to 2010/2011 indicate that Australian households on average insure against income shocks. For a 10% change in income, non-durable expenditures change by 0.14%, while food expenditures change by 0.05%; both results are statistically insignificant. Non-durable expenditures respond asymmetrically to positive and negative income shocks, especially during the Global Financial Crisis, falling by 0.1% for a 10% income rise but falling by 0.6% for a 10% income decline in 2009; the latter result is statistically significant. Controlling for risk tolerance heterogeneity yields identical results.
DOI: 10.1111/1475-4932.12095
Keywords: Income & Finance; Stress -- Financial stress
Research collection: Journal Articles
Appears in Collections:Journal Articles

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